Fueling Economic Growth Through Women's Empowerment

A Report to U.S. Secretary of State Hillary Clinton by the International Council on Women’s Business Leadership Subcommittee on Access to Markets

November 27, 2012
The Honorable Hillary Rodham Clinton
Secretary of State
United States Department of State
2201 C Street NW
Washington, DC 20520

Dear Madam Secretary:

As Chair of the Subcommittee on Access to Markets of the International Council on Women’s Business Leadership, I’m delighted to provide you with a report of the Subcommittee’s work and findings in 2012.

The Subcommittee is comprised of 15 women and men dedicated to improving the economic empowerment of women globally. The membership convened on an almost monthly basis to drive the Subcommittee’s action plan forward via teleconference and in-person. In addition, weekly calls were also held to discuss details and planning.

The Subcommittee sought to increase opportunities for women-owned businesses to access new domestic and international market opportunities to grow their businesses and to create jobs. With this goal in mind, the Subcommittee developed an action plan with three work streams. First, the Subcommittee assisted in the expansion to Latin America of WEConnect International through four “launch” events in the region. Second, it asked its corporate members to identify impediments to sourcing from women-owned businesses. And, third, it developed policy recommendations to support its overarching goals.

I want to sincerely thank you and the U.S. Department of State for your support of global women’s issues. Empowering women economically is key to the growth and development of economies and alleviation of poverty worldwide. I look forward to contributing to efforts on this important matter in the future.

Sincerely,

Sally Susman
Chair, Subcommittee on Access to Markets
International Council on Women’s Business Leadership

I. INTRODUCTION

Increases in international trade can lead to greater employment opportunities for women, which fuels the creation of new jobs and ultimately economic growth. The value goes beyond the economic benefits though,generating improvements in health, education, and quality of life for current and future generations.

Yet, international trade alone cannot eliminate the gender gap. Policies and projects are necessary to address the disparities that contribute to the gaps that exist. For example, women own approximately 35 percent of all private businesses in the formal economy, do 66 percent of the world’s work but receive 10 percent of the income and own only 2 percent of the property. Women are awarded less than 1 percent of money spent on suppliers by large corporations and governments.

In an effort to address challenges associated with advancing and promoting the role of women in a competitive global economy and their effective integration in business, the U.S. Secretary of State established the International Council on Women’s Business Leadership (the Council) in 2010. The purpose of the Council was to enhance the economic empowerment of women through the development and implementation of U.S. policy and projects. Council membership consists of 20 representatives who are leaders of American and foreign public and private sector organizations and institutions having an interest in the role of women in international business, economic policy development and global economic growth.

The focus of the Council’s work is grounded in the Asia Pacific Economic Cooperation (APEC) San Francisco Declaration, which was endorsed by APEC Leaders in Honolulu in November 2011. The Council conducted its work around four pillars which are fundamental to women’s economic inclusion: Access to Capital, Access to Markets, Skills Training and Capacity Building, and Leadership.

Sally Susman was selected to Chair the Subcommittee on Access to Markets (the Subcommittee). The Subcommittee sought to increase opportunities for women-owned businesses to access new domestic and international market opportunities to grow their businesses and to create jobs. To that end, women need the business knowledge and networks that can help them identify and expand their companies.

With this goal in mind, taking into consideration what is doable and impactful in the timeframe allotted, the Subcommittee chose to develop three work streams. First, the Subcommittee assisted in the expansion to Latin America of WEConnect International. Second, it asked its corporate members to identify impediments to sourcing from women-owned businesses and, finally, it developed policy recommendations to support its overarching goals.

The Subcommittee convened on an almost monthly basis to discuss the status of the three work streams. One in-person meeting was held in Washington, DC. In addition, multiple calls were held weekly to drive the process forward.

II. EXPANSION OF WECONNECT INTERNATIONAL

The Subcommittee developed a plan to partner with WEConnect International and assist in its expansion in Latin America to expand market-access knowledge, resources, and opportunities to women-owned businesses.

WEConnect International is a global non-profit that seeks to connect women-owned businesses to multinational corporations by leveraging technology that includes a searchable global database of women-owned businesses and by providing knowledge and expertise through in-country advisors and certification services. It is a corporate member organization, whose members represent over US$700 billion in annual purchasing power. It collaborates with a range of supporting organizations to promote businesses that are at least 51 percent owned, managed, and controlled by one or more women.

The Subcommittee held “WEConnect International launch events” in Brazil, Chile, Mexico, and Peru to bring together the women-owned business, multinational corporations, and public and private-sector stakeholders with the goal of providing opportunities for them to partner with WEConnect International’s corporate members and other women-owned businesses.

With support from the Inter-American Development Bank, Walmart, and other local partners, WEConnect International announced plans to provide training to more than 600 women entrepreneurs in Chile, Costa Rica and Peru in order to facilitate their access into larger markets over the next two years. The WEConnect International expansion in Peru is a continuation of the work made possible by the generous support of the U.S. Agency for International Development and the U.S. Department of State Pathways Access Initiative. The Initiative originally launched in 2011 to support U.S. corporations with supplier diversity and inclusion goals in Peru by identifying, training, and certifying women-owned businesses that qualify as diverse suppliers of goods and services.

A. BRAZIL

The first Subcommittee event was held in Sao Paulo, Brazil. Brazil was chosen because it’s an economic powerhouse with growth potential. It is often the number one market in the region for multinationals, which made it an obvious fit. In addition, WEConnect International had not previously engaged women-owned businesses or public and private sector stakeholders in the market. The event brought together corporate executives, government leaders, academics, NGO representatives, and Brazilian businesswomen, and featured two substantive panels.

The first panel discussed how to scale Brazilian women business owners and the second panel focused on how to engage women vendors while conference participants focused on the challenges of small businesses in Brazil. Angela Fontes, an economist with the Sub-Secretariat of Policies for Women, highlighted Brazil’s high levels of entrepreneurism, which stem from opportunity and not just necessity, while also discussing the problems of microcredit stating that Brazil needs to “confront these challenges”. Fontes also discussed the increase of women in the workplace –44 percent today compared to 11 percent in 1970 –however, she stressed the fact that many are not in decision-making positions. Adriana Machado, CEO of General Electric, discussed the “constant struggle” for women entrepreneurs in Brazil, noting that the WEConnect International initiative was important to the women business owners of Brazil who want to access new markets.

Given the groundswell of support for WEConnect International in Brazil evidenced by the event participants and their enthusiasm, the time was ripe for the launch and for additional engagement, especially in preparation for both the World Cup and Olympics.

Angela Fontes, Sub-Secretariat of Policies for Women, Government of Brazil

Vera Oliveira, Ministry of Agriculture, Government of Brazil

Daise Rosas da Natividade, EOSS Consulting

Silvia Tyrola, Accenture Brazil

Carla Fernanda Dora, IBM Brazil

Janaina Silveira Peres, Pfizer Brazil

Nadir Moreno, UPS Brazil

Belisa de las Casas, WEConnect International

B. PERU

The second Subcommittee event was held in Lima, Peru. The U.S. and Peru recently implemented a free trade agreement, establishing the legal foundation and predictability for increased international trade. This, combined with the success of WEConnect International’s pilot project in Peru, made Peru an ideal candidate for the Subcommittee’s plan. The Subcommittee event was incorporated into the high-level conference “Power: Women as Drivers of Growth and Social Inclusion,” attended by Peruvian President Ollanta Humala, U.S. Secretary of State Hillary Clinton, United Nation’s Women’s Executive Director Michelle Bachelet, and more than 400 leading figures from the public and private sector. The conference served as a venue for announcing several initiatives focused on social and economic inclusion of women in the region and provide the perfect platform for the Subcommittee event.

The Subcommittee and WEConnect International hosted a reception that was well-attended and provided an opportunity to educate more than 110 attendees about the benefits of WEConnect International and ways to better integrate Peruvian women business owners into global value chains. The ongoing work of WEConnect International in Peru is made possible by the Inter-American Development Bank and Walmart.

Place: Lima, PeruVenue: Hotel Westin, LimaDate: October 15, 2012Number of Attendees: 110+Organizing Partners: Inter-American Development Bank (IDB), Government of Peru Ministry of Social Inclusion, U.S. Department of StateSupporting Stakeholder: Pfizer Inc. and Walmart

Speakers and Special Attendees:

Elizabeth Vazquez, WEConnect International

Ambassador Melanne Verveer, U.S. Department of State

Adele Gulfo, President Latin America, Pfizer

Fidel Jaramillo, Country Representative, IDB Peru

Carolina Trivelli, Minister of Social Inclusion, Government of Peru

Rodrigo Puga, President, Pfizer Peru

C. CHILE

Chile is also a free trade agreement partner of the United States, has a well-developed economy, and respect for the rule of law, which made it an easy choice in terms of expanding WEConnect International’s reach. The event was well attended by more than 120 government officers, corporate officials, and Chilean women business owners. The objective of the event was to celebrate the partnership with Mujeres Empresarias and officially launch WEConnect International’s operations in Chile made possible by the Inter- American Development Bank and Walmart.

The event was highlighted by the presence of Chilean Minister of Women’s Affairs Carolina Schmidt and Undersecretary of the Economy Tomas Flores. Minister Schmidt underscored the importance of women’s economic development and the advances that her administration is making towards achieving more opportunities for women. Referring to the launch of WEConnect International in Chile, she also celebrated Secretary Clinton’s Council’s efforts in support of women and access to markets. Undersecretary Flores highlighted the role of women as engines of growth in the Chilean economy.

Two panel discussions were featured, the first on commitment to women business owners where a representative of the Inter-American Development Bank’s Multilateral Investment Fund presented the Latin America portfolio of tools to support the growth of women-owned businesses. U.S. Ambassador to Chile Alejandro Wolff and Jacalyn Spedding, former liaison to the U.S. Department of State, referred to the vision of the Council and future plans. The second panel focused on why corporations need women suppliers and representatives from IBM and Walmart discussed the business case in favor of sourcing from women vendors.

D. MEXICO

Mexico was the fourth and final location for the Subcommittee’s event to launch WEConnect International. Its size, proximity to the United States, and bilateral trade relationship with the United States made it the perfect location for the Subcommittee’s plan. Similar to Peru, WEConnect International had relationships already established in the market but could benefit further from the Subcommittee’s assistance.

The Subcommittee event launching WEConnect International was incorporated into the “The Global Platform for Action on Sourcing from Women Vendors” framework, which aimed to increase the share of corporate, institutional, government, and institutional procurement secured by women vendors with the ultimate aim of bringing economic benefit to women and their communities.

This three-day event featured the Second Women Vendor Exhibition and Forum (WVEF) and the Fourth Senior Executive Roundtable on Sourcing from Women Vendors and was organized by the International Trade Center (ITC) and WEConnect International along with other partner organizations such as ProMexico, Ministry of Foreign Relations of Mexico, Mexican Association of Women in Business, Quantum Leaps, etc.

The event convened more than 370 delegates from the private sector, women business owners, government and civil society from over 40 countries (mostly developing countries).

Moreover, the event brought together 45 buyers and 146 sellers to actively engage in one-on-one business meetings. In particular, the Subcommittee’s event was attended by over 330 delegates and featured a welcoming address by Honorable Kathleen Kennedy Townsend representing the Council. Townsend emphasized the support of the Subcommittee for WEConnect International’s initiative to launch in Mexico with the generous support of the U.S. Department of State and ExxonMobil.

After the three day event, a total of 63 letters of intent were signed and $6.5 million dollars in sales were closed. A memorandum of understanding between WEConnect International, ProMexico, and the Association of Mexican Business Women was signed, committing the three organizations to follow up proactively on the initiatives established during the event.

Linda Scott, DP World Chair for Entrepreneurship and Innovation, University of Oxford

E. AFGHANISTAN

In addition to the four events in Latin America, with the help of one of its Members in particular, the Subcommittee hosted a forum in Afghanistan sponsored by the American University of Afghanistan (AUAF). The Forum was held on September 20.

The overall purpose of the forum was to duplicate in a smaller way the Subcommittee’s events held in Latin America. The event raised awareness of WEConnect International, informed the audience of the Subcommittee’s work, and gained a slight inroad to helping the women’s business community in Afghanistan understand the value of a strong global network.

The event was held at the International Center for Afghan Women’s Economic Development on the International Campus of AUAF in Kabul. The overall goal of the Center is to lead a national private-sector program to promote, coordinate, collaborate, and connect the numerous and diverse public and private sector efforts to advance and empower women in the economic stabilization and civil society of Afghanistan.

Female members of parliament attended, including Shinkai Karokhail, Dr. Zalmai Rassoul , Dr. Husn Banu Ghazanfar, Dr. Suraya Dalil, Zohra Nadiri, and the youngest MP in Parliament, Nahid Naheed Farid. Additional participants included women business owners, NGOs, members of the U.S. Afghan Women’s Council and diplomats from the U.S. Embassy involved in gender issues were all invited. However, due to the unrest in the city and the embassy lock down, the list of actual attendees was smaller than anticipated.

The audience enthusiastically welcomed the discussion and it was a positive and productive forum.

III. IDENTIFYING IMPEDIMENTS TO SOURCING FROM WOMEN-OWNED BUSINESSES

In an effort to identify impediments to sourcing from women-owned businesses, the Subcommittee asked their corporate members to connect with their procurement division and evaluate the lessons learned when sourcing from women business owners. The findings are outlined below.

Why Integrate Women-Owned Small Businesses?

Companies that focus on supplier diversity and inclusion generate greater returns on procurement investment than typical businesses. In addition, corporations that mirror their communities in terms of supplier diversity and inclusion attract and retain better and more diverse talent. These companies also boost brand loyalty and increase revenue among a diverse consumer base.

Providing a percentage of business activity to women-owned suppliers enables corporations to lower their risk of failure. To reduce risks and ensure stability, corporations should purchase needed products and services from at least two competing suppliers. Doing so establishes women-owned small businesses as relevant suppliers.

How Do We Make it Happen?

To achieve the benefits of supplier diversity, corporations can promote inclusive sourcing from women-owned small businesses in their bidding procedures. This approach may include establishing channels through which women-owned small businesses are alerted to bid opportunities, while still competing as equals for the business.

An additional method of increasing successful proposals from women-owned small businesses is to direct all bid responses to dedicated inclusion managers. These managers could assess proposals submitted by women-owned small businesses. Suppliers would be reviewed with a unique scoring system and receive detailed bid responses. Such feedback would enable women-owned small businesses to learn and improve their bid quality.

What are Common Barriers to Entry?

Women-owned small businesses face common barriers that often limit their access to corporate supply chains. These barriers can include a lack of proven business track records and reduced capacity. The size, sustainability, and financial history of a supplier are key requirements that can be difficult for women-owned small businesses to meet. In addition, preferential treatment is often given to large, established suppliers.

Women-owned small businesses also face challenges of scalability, technology, and added-value. They must overcome limits on their exports and global market reach, and women-owned small businesses frequently are still developing business knowledge and skills.

How Can We Overcome Barriers?

Identify at least one sector in which a critical mass of women-owned small businesses exists.

Determine the nature of the supply chain, its players, and key service providers.

Optimize the business’ supply chain to operate effectively and sustainably while benefitting those who add real economic value to it.

Identify the needs and constraints of players and service providers of the supply chain so that they can perform their role in an optimized supply chain.

Design a development program to implement the optimized supply chain in partnership with women-owned small businesses.

Understand what the business requirements are and take time to build a relationship, even if there are no current opportunities.

Become certified to gain access to corporations that have set a goal of doing business with women’s business enterprises. Get to know and be known by your local government agencies.

Focus on a specific niche and start off with smaller clients to build experience.

Use supplier diversity as one avenue to get your foot in the door. Find out who the appropriate contacts are, but focus on your capabilities when you meet them.

Define your points of differentiation –compete in areas where larger competitors are not dominant, or where it doesn’t make sense for them to compete.

Promote the advantages of working with small businesses: cost savings, quick response, innovation, client loyalty, better overall quality and service.

Don’t be afraid to be yourself. Have confidence that you deserve that seat at the table.

Resources

The U.S. Department of State’s WEAmericas initiative leverages public-private partnerships to increase women’s economic participation and overcome barriers to training and networks, markets, and finance.

WEConnect International, a corporate-led non-profit educates and connects women business owners to over US$700 billion in annual purchasing power and also certifies women’s businesses enterprises based outside of the United States.

Women’s Business Enterprise National Council is the largest third-party certifier of businesses owned, controlled, and operated by women in the United States.

The International Trade Centre’s Global Platform for Action on Sourcing from Women Vendors aims to increase the share of corporate, government, and institutional procurement secured by women vendors.

A consortium of companies lead by IBM established the Supplier Connection web portal for small businesses to more easily apply to become suppliers to large companies.

How To: Success Stories

AT&T’s Global Supplier Diversity Program directed $12 billion to minority-, women-, and disabled veteran-owned businesses in 2011. This was 23 percent of total procurement.

Pfizer’s U.S. supplier diversity and inclusion program provides greater choice in suppliers while promoting good government and community relations.

IV. POLICY RECOMMENDATIONS

In its third work stream, the Subcommittee aimed to identify policy recommendations i) that could be adopted by governments to improve access to markets for women-owned businesses and ii) to improve the goals established under the Millennium Development Goals.

RECOMMENDATION 1: Support the Global Platform for Action on Sourcing from Women Vendors and WEConnect International; Replicate good policies and practices as seen in Mexico, Malaysia, and India.

Trade policy and international development frameworks are typically developed without due regard for the impact on women’s economic empowerment. Despite commitments made to gender equality in national and international fora, governments have been slow to design policy frameworks conducive to women’s economic empowerment in general, and their access to markets in particular. In order to effect change, entry points need to be identified and recommendations for improvement need to be implemented.

Support:

1. The Global Platform for Action on Sourcing from Women Vendors:

A. In particular, the Women Vendors Exhibition and Forum –an annual international event where women business owners from developing countries meet corporations and governments interested in sourcing from women-owned enterprises; and

B. Advocacy efforts to increase number of corporations and governments that, like the U.S. government, have targets on sourcing from women-owned enterprises.

2. WEConnect International:

A. Certification of Women’s Business Enterprises as 51 percent or more owned, operated and controlled by one or more women; and

B. The growth of the WEConnect International database of women’s business enterprises to promote supply-side visibility to interested multinational corporations.

3. State governments of India: Sponsoring the participation of women-owned enterprises in trade missions and international trade fairs.

RECOMMENDATION 2: Integrate specific measures to achieve the economic empowerment of women through entrepreneurship at the goal, target and indicator levels of the Post 2015 Development Agenda.

The pressing market challenge is to ensure that robust language on women’s economic empowerment is included in any internationally established goals to guide the development community’s efforts, and particularly those of governments, in the post-Millennium Development Goals world. Based on desk research that highlights shortcomings in indicators used to measure progress against the Millennium Development Goals, the Subcommittee developed recommendations to strengthen the framework.

Fostering women’s entrepreneurship is key in a world where paid employment is scarce and where successful entrepreneurs themselves create jobs. Unambiguous research has highlighted time and again the development impact on increasing women’s incomes: Women spend up to 70 percent of earnings on the family, including health and education, which are priority areas under the existing Millennium Development Goals. We simply cannot let another 15 years go by where women are the object of development policy and not also empowered to be the agents of change themselves as successful entrepreneurs.

The competitiveness of women’s enterprises is greatly enhanced through the provision of technical assistance. In developing countries any such assistance that may be available at the national level is boosted by technical assistance provided by the United Nations, non-government organizations and directly through agencies such as USAID, UKAID and others. One of the key challenges in accessing technical assistance to enhance the competitiveness of women-owned businesses is the fact that neither ‘entrepreneurship’ nor the ‘economic empowerment of women’ is specifically mentioned in the Millennium Development Goals, the gateway through which actions have been prioritized since 2000.

The current Millennium Development Goals will expire in 2015 and with their expiration comes an opportunity to advocate for the inclusion of a clear integration of language in the Vision and –importantly –at the goal, target, and indicator levels in the Post 2015 Development Agenda.

Recognizing:

Women’s economic empowerment through entrepreneurship is critical to growth and development.

Lack of access to markets impedes the growth of women-owned businesses and restricts the number of jobs created.

The ability of women active in the marketplace to expand their markets (domestically and internationally) can be improved by realizing women’s business acumen (including through mentoring and technical assistance programs); increasing access to market opportunities (including through match-making and technical assistance programs) and access to information on regulatory environments; and promoting greater opportunities to obtain and deliver on government and corporate contracts (including through supplier diversity and inclusion initiatives), including access to the resources necessary to succeed in business and in trade.

To address these challenges, the Subcommittee recommends that the U.S. Department of State articulate the importance of women’s economic empowerment through entrepreneurship in all fora concerning the Post 2015 Development Agenda and advocate the integration of specific measures to achieve the economic empowerment of women through entrepreneurship at the goal, target and indicator levels.

However, care must be taken to ensure appropriate monitoring mechanisms are put in place to capture, inter alia, the increase in women’s incomes. Economic empowerment means increased income in the hands of women: increases in productivity or in aggregate export earnings that do not impact women’s earnings do not deliver on this goal.

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